Medical corridor development projects air of viability in Memphis community
Memphis Business Journal - by Michael Sheffield

The recession may have crippled most new development across Memphis, but a drive through the city’s medical corridor tells a different story. There is currently $1.5 billion worth of development under way in the medical corridor ranging from a parking garage at the University of Tennessee Health Science Center to the $450 million UT/Baptist Research Park that will house the Memphis Bioworks Foundation’s offices. Also under construction is Le Bonheur Children’s Medical Center’s 650,000-square-foot hospital that includes a 12-story tower and a new emergency room. That project is budgeted around $327 million. Other projects in the area include the $8.5 million Harrah’s Hope Lodge, which will provide cancer patients and their families with a short-term stay facility. Le Bonheur is also building FedEx House, a short-term stay facility for its patients and their families, budgeted at around $8.5 million. The 30 known projects in the medical corridor are all in different stages of development, but what those projects show to Memphians and people visiting Memphis is a commitment to the growth of the second largest industry in the city, says Leigh Anne Downes, director of life science business development for the Greater Memphis Chamber. “Anytime a company comes to town and sees cranes in the air, they know the area is viable,” Downes says. “New development not only says the organization is investing in the community, but the community is investing in the organization.”

Beth Flanagan, director of Memphis Medical Center, says the city’s reputation precedes it in national circles, but the development going on in the medical corridor also serves as a conversation starter and an excitement generator at the same time. She says the challenges will be to create the work force to staff the hospitals and research center that are being developed. Memphis Bioworks Foundation, which also runs the Memphis Academy of Science Education and Education, is working to grow that talent from the ground up. “They can start with the charter school and go up to graduate degrees to create that work force,” Flanagan says. “Then you have organizations like Innova (Memphis, Inc.) to help with the patents and marketing plans. All of those pieces are in place.”

Le Bonheur’s expansion — which is on track to be completed by spring 2010 — will enhance the infrastructure of the area, says Cato Johnson, the hospital’s senior vice president of corporate relations. The bigger developments not only help attract other development and business to the area, but also enhance the quality of care for the existing population, Johnson says. “Those are major additions to the Memphis landscape as it relates to health care for this community,” Johnson says. “We also shouldn’t forget that Memphis itself will be a healthier community because of it. When we’re done, we’ll honestly be able to say the city has some of the best health care available.” When the UT/Baptist Research Park is completed, possibly by 2015, it will represent the latest transformation that has taken place over the last 60 years in the medical community in Memphis, says Bill Tuttle, vice president of planning for Baptist Memorial Healthcare Corp. Baptist donated its former Downtown hospital for the project, which Tuttle says represented an $80 million gift. Baptist also donated the land where the University of Tennessee is building its new pharmacy school. Tuttle, who has “been running around the medical center all my life,” says the development is definitely a great thing for the city, but what goes on in those buildings is more important than the mere presence of them. Tuttle says with the right staff in place when development is completed, no one can fathom how far the city can go. “You can’t put a limit on research talent and brain power,” Tuttle says. “When you look at Bioworks and the biomedical industry, it allows us to integrate well with other entities and parlay some of our existing strengths beyond just medical and science.”

One of those industries is FedEx Corp., which Downes says helps the existing companies meet federal medical shipping regulations. Companies that ship devices, vaccines or body tissue often have a federally mandated 72-hour window to get products to clients. Having FedEx in the city has made all of that possible. “If you have a product, it either came from Memphis or was shipped through Memphis in some capacity,” Downes says. More importantly, she says, is the fact that it will create high-skilled and high-paying jobs, keeping the talent the city is currently growing and attracting new people. “Biotech isn’t replacing what Memphis is known for, but it is enhancing the work force and opportunities for work in Memphis,” Downes says. “You can’t help but be excited about that.”

The Natural Sciences, Nursing & Biotechnology Building at the Union Ave. Campus in the Memphis Medical Center.

In the Design/ Planning stage, construction of 3-story structure; will include a 200-seat auditorium, 16 classrooms, a nursing wing, and laboratory budgeted at $16 million. Construction is expected to begin in Spring 2010.

UT Health Science Center Cancer Research Center, $21,000,000
101,000-sf, four-story medical sciences research facility for the University of Tennessee College of Medicine. The new facility, to include laboratory and office space for 36 reasearchers and their support staff, in-house conferencing and library rooms, and meeting space.

Research Center Next On UTHSC Building Agenda
TOM WILEMON | The Daily News

OPEN SITE: The translational research building for the University of Tennessee Health Science Center will be built on a vacant lot south of the Cancer Research Center and linked to that building with an elevated walkway. -- PHOTO BY TOM WILEMON

A center where scientists from different fields of medical research can share ideas toward common goals will be the next new building slated for construction on the University of Tennessee Health Science Center campus. The university on Thursday will ask the Tennessee State Building Commission’s blessing to proceed with the $49 million translational research building project on a vacant lot at the northwest corner of Union Avenue and Manassas Street. Construction could begin as early as next year. “In relatively short order, we hope we have the proverbial green light to move forward with that project,” said Kennard Brown, UTHSC executive vice chancellor and chief of staff.

Next in line
UTHSC received the blessing last year from the University of Tennessee Board of Trustees to fund the project with state bonds. Trustees also approved using bond money for a new clinical building, which will be next in the construction lineup. The buildings will be the second and third projects following the $49.6 million College of Pharmacy, which is already under construction. In total, UTHSC’s goal is to invest between $160 million and $200 million in campus upgrades as part of a five-year plan. The translational research building will be connected by an elevated walkway to the Cancer Research Building, which opened in 2007. “What we want to do is kind of model it after the Cancer Research Building,” Brown said. “It will be kind of thematically designed, where we’re not going to put a particular department of basic scientists in there. We’re going to build it around three major research themes: cardiovascular and neurological diseases and then some infectious diseases. We will have science investigators from departments like physiology, pharmacology and from the department of medicine. It’s not going to be one particular unit of investigators in there. It will be a multidisciplinary open laboratory shared space.” In the cancer research building, interested collaborative efforts under this model have included dentists working with pathologists on oral cancer investigations, Brown said. The five-year plan calls for adding another 100,000 square feet of research space. “To recruit world-class scientists to come to Memphis to research cardiovascular disease or do neurological research, you need those kinds of facilities that people can practice their craft in,” Brown said. “For a basic scientist, it doesn’t matter how much compensation you offer them. The first question they have is, ‘Where’s my laboratory?’ For people to do world-class research, you really need state-of-the-art world-class facilities.”

More changes
With the new clinical building, the campus will see a dramatic increase in clinical space going from 5,000 square feet to 150,000 square feet. The university’s plan is to put the new clinical building at the southeast corner of Dunlap Street and Union behind the Scottish Rite of Freemasons building. The university is seeking to acquire property related to this project. Some old buildings on campus will be demolished to make room for the changes, including the Beale, Randolph and Feurt buildings. “Randolph at the corner of Madison and Manassas is basically off line,” Brown said. “We have for all intents and purposes shut it down. No utilities. I think to the casual observer who drives by that building it looks like a pretty structurally sound building that’s there. But it is empty, has no power and we’ve got demolition plans for it.” The UTHSC will have to wait on state funding for other components of the building plan, including renovations for office space, an educational annex and a new student center. Before state bonds will be issued for the translational research building and the clinical building, UTHSC must present business plans for how it can pay the debt obligations. It will rely on federal research grants for the translational building. The debt service on that building is expected to be about $4 million a year. The university is still developing a business model for the clinical building. “For the clinical facility, it’s a little more complicated dynamic,” Brown said. “We’re being very, very deliberative and trying to be conservative in modeling before we go to the commission.”

MERI Works to Become World-Renowned Training Facility
TOM WILEMON | The Daily News

The reach of the Medical Education and Research Institute expands far beyond the former post office it occupies on Cleveland Avenue. The largest surgical training center in the country using donor bodies, MERI has taught new procedures in the past year to more than 9,500 physicians from the United States and abroad. Their visits and other business generated by MERI will bring an estimated $54 million into the Memphis economy, said Elizabeth Ostric, the institute’s executive director.

Solid financial support for MERI has helped keep Memphis at the forefront of medical innovations since the training center opened in the old post office in 1994. Its primary benefactors are Baptist Memorial Health Care, Methodist Le Bonheur Healthcare and Semmes Murphey Neurologic and Spine Institute. During the past year, MERI has raised about $1.7 million. The institute began a $10 million capital fund drive about two years ago, but has since changed its fundraising strategy to make it a continuing annual effort. “We have been given a lot of different (types of) donations,” Ostric said. “Some have been cash so we could finance the refurbishment of this building and make for more lab space so that we could actually train more students.” Companies have also loaned training equipment, such as a da Vinci robotic surgical system and an O-arm, a system manufactured by Medtronic Inc. that allows simultaneous multidimensional monitoring during surgical procedures. “Our vision is to be the leading hands-on medical education and training institute in the world,” Ostric said. “It’s important to keep that new technology coming all the time.”

Last year, MERI spent $700,000 to expand its 27,000-square-foot facility with another 2,000 square feet. This year, it purchased an adjacent building at 1381 Madison for $800,000. The city of Memphis within the past month approved plans to reroute an alley between MERI and the adjacent building so a parking lot can be expanded and gated. “What we will eventually do is we will knock down that building,” Ostric said. “As donations and tuition permit, we will actually expand our teaching facilities there.”

IN THEIR COURT: San Francisco-based McKesson Corp. is considering making a major investment in Memphis. McKesson executives are shown ringing the opening bell of the New York Stock Exchange last year. -- PHOTO COURTESY OF MCKESSON CORP.

Members of the Memphis-Shelby County Industrial Development Board were told last month the board’s tax incentive program needs to be tweaked – and soon. The reason: a major economic development project coming before them in November needs the new provisions.

That project involves McKesson Corp., a San Francisco-based multiplatform health care services company, making a capital investment of as much as $186 million in a new corporate campus in Memphis. McKesson is considering four different ways to consolidate three of its local operations, with the new facility the company develops ultimately serving as its U.S. logistics and supply chain headquarters.

Executives of Medtronic Inc. celebrated a $65 million expansion of its distribution center Tuesday morning that will allow the medical device company to ship additional products.

The Medtronic Distribution and Logistics Campus at 4340 Swinnea Road encompasses 22 acres and two buildings. The company purchased the property from Weston Co. then built or expanded existing buildings.

Eventually, Medtronic expects to have more than 260 people working at the facility. The Minneapolis-based company already employs 1,500 people in Memphis.

Rob Varner, senior director of U.S. distribution operations for Medtronic, said devices from divisions other than the Memphis-based Spinal & Biologics Business division will be shipped from the city, which he called “one of the crown jewels” in the company’s distribution network.

“Now, Medtronic has a strategy for all the business units to take advantage of this location,” Varner said. “That’s why we expanded the location.”

River Tower at South Bluff condominiums sold out in an auction that took another bite out of Downtown's surplus of unsold units. J.P. King Auction Co. of Gadsden, Ala., reported selling 15 units at prices ranging from $77,500 to $155,000 at The Peabody on Saturday. The 14-story, 153-unit River Tower at 655 Riverside Drive is the former Rivermark apartments and Holiday Inn-Rivermont. Houston-based McCord Development spent $17 million to renovate the property starting in 2006, but the recession hammered home sales before all the units could be sold. McCord, which used J.P. King to sell 20 units in June 2008, brought the auctioneer back Saturday to liquidate the remaining inventory. "I think we were overall pleased, and our partners were pleased," said Mike Maerz, director of investments for McCord. "Always you hope to achieve higher prices, but we were pleased with the prices we got in this market." Previous sales at River Tower ranged from $105,000 to $533,000. Maerz said an auction proved to be the right approach in today's buyer's market. "In the current market, there's a lot of skepticism and people have no sense of urgency and are not in a rush to make a decision. The auction is a call to action." J.P. King president and CEO Craig King said the auction drew 53 registered buyers from seven states and netted just under $1.7 million.

The auction came two months after King sold out The Nettleton condominiums in an old Piggly Wiggly warehouse at Front and Nettleton. The recent auctions will help reduce Downtown's considerable inventory of unsold condos actively on the market. The inventory was 96 units as of Sept. 30, according to figures compiled by development consultant Tony Bologna. However, the total excluded 129 condos taken off the market by leases or lease-purchase contracts, as well as 155 units at The Horizon, a foreclosure-stalled project at 717 Riverside. Center City Commission officials said there had been no official word from Capital One Bank on when construction on The Horizon might get going again. Between River Tower and The Nettleton, J.P. King auctioneers have sold 45 Downtown condo units since September. By comparison, 41 condo sales closed in the first nine months of 2009.

When Washington-based CQ Press released its annual list of city crime rankings Monday morning, those who know the most about crime in Memphis did what they do every year -- cried foul. Because while the city of Memphis shows up as No. 10 on CQ Press' crime-rate rankings -- and the eight-county metro area as No. 2 -- it is what the rankings leave out that make many believe they paint an unfair and inaccurate view of the city.

"We report everything, every crime, but they take these numbers from places that don't have to report what we report," said Memphis Police Department director Larry Godwin. "How is that fair? It's not fair that in New York, theft from a motor vehicle is not reported unless it is more than $1,000 but if you got a broken window in Memphis, we report that." Godwin quickly points out that Memphis' crime rate, as of Monday, was down 17.34 percent compared with the same period in 2006.

CQ's reports are based on 2008 crime statistics that cities reported to the FBI for its Uniform Crime Report, and uses six categories -- murder, rape, robbery, aggravated assault, burglary and motor vehicle theft. The FBI rejects the rankings, saying on its Web site: "These rough rankings provide no insight into the numerous variables that mold crime in a particular town, city, county, state or region. Consequently, they lead to simplistic and/or incomplete analyses that often create misleading perceptions adversely affecting communities and residents."

University of Memphis criminologist Richard Janikowski, who helps MPD with its data-driven Blue Crush initiative, points to the stance of the American Society of Criminology: "Such rankings are invalid, damaging, and irresponsible."